Study: ACA Decreased Out-of-Pocket Costs, Increased Premiums

During the first 2 years of the Affordable Care Act (ACA), families saw a reduction in out-of-pocket (OOP) medical costs, but an uptick in premium payments, according to a new study published by JAMA Internal Medicine.

These findings highlight how the ACA shifted costs from low-income individuals to high-income individuals, while also altering OOP spending, according to the study.

“Our findings suggest that the Affordable Care Act reduced out-of-pocket costs for many Americans,” said lead author Anna Lise Goldman, MD. “While the law helped ease families' medical cost burden, it didn’t stem the steady rise in families’ premiums and left plenty of room for progress.”

The authors of the study examined the medical spending of 843,431 non-elderly patients during the 2 years before and after ACA implementation. The authors analyzed spending on OOP medical expenses and premiums.

The authors discovered that yearly savings on OOP expenses averaged $74 (12%), with lower-income patients saving an average of 21.4%. In contrast, higher-income patients did not benefit from any savings, according to the study.

Higher-income individuals also experienced a 23% increase in their premium costs; however, patients in other income groups did not see a substantial increase.

During this time, premiums increased an average of $232 (12%), according to the study.

“It's not surprising that the ACA's effects were modest,” Dr Goldman said. “Only 6.5% of Americans gained coverage through the ACA, while about 28 million remain uninsured. Moreover, efforts to make the ACA’s financing budget-neutral limited the generosity of subsidies and may have reduced the law’s potential to reduce medical spending.”

The researchers also examined the rate of “high-burden spending,” which was characterized as spending 10% of income on OOP medical costs or 5% for low-income individuals. Premiums were classified as high-burden if it accounted for more than 9.5% of income.

High-burden OOP spending dropped 20% overall, but the authors noted the most significant decrease was found among low-income individuals, according to the study.

Middle-income households also experienced a 28% increase in high-burden premium spending. The authors found that other income cohorts did not experience such a dramatic change.

“The ACA helped smooth out spending and make it more predictable,” said Stephanie Woolhandler, MD. “Fewer families were left with high out-of-pocket costs when they were sick but paid more in up-front premiums. But the law fell far short of what many nations with single-payer systems have achieved: universal, comprehensive and affordable coverage.”